Why do some online businesses thrive while others fail? I asked three people that question today and got three different answers. A designer replied, “Their website was not visually impressive”. An accountant said, “No cash flow.” All good answers except some of the most profitable websites are not “visually impressive” – think Amazon.com!!! I have clients that launched with a few thousand dollars and turned it into millions.

Why do so many online businesses fail?

I am going to tell you what I have witnessed firsthand from years of helping businesses successfully establish and grow their online presence. These are real stories from the trenches.

1. Not Realizing How Much Work Growing a Business Requires

The operative word here is ‘growing’ a business. It is easy to start an online business. Growing that business is another story. It takes a lot of consistent action to grow a business. The “Four Hour Work Week” is a myth if you are trying to get your business off the ground. I have never witnessed a client start and grow a business into the millions on a four hour work week. Once they make the millions and hire people to run the company then they can work a four hour work week. Until then, it takes diligent work and a commitment to work it daily. If your plan is to start a business and put fours hours a week into it then get a hobby and save yourself a headache. It also requires several skills which I will address in #4.

A Real Story

An entrepreneur hired me to help him increase sales. Six years into his business, he was barely profitable. He had a minimum viable service and hungry to see his business grow. I mapped out the sales funnel, created marketing assets, planned an ad campaign and recorded a video with a great landing page. A week before launch, he came to my office to review his sales script. 3o minutes into our meeting, he announced, “I am thinking I won’t call the leads back for three weeks because I am going to Florida. I really hate New York winters.” I replied, “Call them while in Florida!” With a serious face he tells me, “I really like to take it easy while I am there.”

We paused the campaign and launched when he returned. He got 68 qualified leads within two weeks. Excellent! More leads than he got in the past six years combined.

So what was his ROI? Nothing. Zero. Why?

He only called 19 people back because he did not expect to get so many and did not want to do the work of calling 68 people and onboarding them. I finally understood why his sales were flat after six years. He did not realize how much work is required to grow his business. You are probably thinking, why didn’t he hire a salesperson? Simple answer, he did not want to hire a sales person because he would have to pay them.

2. Lack of Expertise

You must understand the business of “Business”. The world of business is like a symphony where an entire orchestra comes together to make beautiful music. Like a symphony, you need to understand how all of the online pieces intersect to create growth. There is the website that resonates with your audience and all of the layers that make up a high-converting website. There is digital marketing and its layers. Then you have accounting and operations. The list goes on and on. The good news is you don’t need to be an expert in each one. BUT…you do need to have an understanding of how all of the pieces fit together. I have clients that did not have a basic understanding of these pieces on day one; however, they took out the time to understand them then delegate and outsource what they should not be doing. If you understand business, you can better plan and execute. This enables you to say, “Yes, I understand why I need a search engine marketing budget” or “No, instead of introducing a new service, I need to refine the delivery of this one.”

If you understand the business of online business, you can better plan and execute for growth and focus on what will bring in the most revenue.

3. Turning Lean Startup into a Low-Quality Startup

Do not take the concept of the Lean Startup to the extreme. I read the book Lean Startup and yes, it had some great concepts BUT recognize there is a difference between a Lean Start Up and a Low-Quality Startup. If you launch your product or service using a minimum inferior approach, you will not grow. For example, if you hire a techie teenager with no experience in user interface design and digital marketing to build your website you will save a lot of money BUT you will lose a lot more than you saved.

A Painful Story from the Trenches

I get a call from a pleasant woman who sells an organic product. She has boxes of inventory in storage and wants to know if I can redesign her eCommerce website and implement digital marketing. I take a look at her website and point out the first problem, the product photos are horrible. I explain how product based businesses need to present the physical product in the best possible light. She proceeds to quote from the Lean Startup book. I explain that I have worked with other product based businesses and the difference in revenue when you have good photography is amazing. I send her links to other customers (www.loloirugs.com, www.onabags.com) with excellent photography. She decides she will use the current photos until she sells the existing inventory then she will take that money and hire a good photographer.

I nicely decline the project and recommend another web company that is not fanatical about getting clients real results. That was two years ago. I ran into her a few months ago and she still has all of that inventory sitting in storage. Once she sells it she will get the nice photos because she is, after all, a Lean Startup.

4. Not Listening to the Experts

You hire a web design agency to build your website because you do not have the expertise in-house. Excellent start! Except at every turn, you ignore the advice of the agency that has years of experience. Or you get your neighbors advice (who is not in your target market) on how it should look. Tip…if your friend is not in your target market, don’t worry about what they think. You must provide your vendor insight into your customers and company; however, ignoring their recommendations on conversion optimization, user interface design and technology is going to hurt you. Your vendors spend their days working in their field and have years of experience that you may not have since you are focused on delivering your product or service. I listen when my accountant tells me I can’t deduct XYZ or I will get in trouble with the IRS.

A Story About Waste

If you have ever worked with me you know I really care about my clients. Which makes this one especially frustration. We completed a small project for a client when they announce they want to hire us to redo their website. They want something amazing. He proceeds to explain he wants an all Flash website with music on autoplay and animated things. As delicately as possible, I explain to him that an all Flash website is a bad idea because mobile users are increasing and the experience will be degraded for mobile users. In addition, Google announced that all Flash sites will be penalized in the organic rankings. I go into detail about how autoplaying music on a business to business site that is targeting business users while at work is not best practices. I show him the statistics to support my position. He sticks to his vision so I tell him he should hire another agency as I take no pleasure in taking his money to deliver something that will not serve him well.

He hires another agency and they build him a Flash website with sound, animation and every other feature you can think of that breaks usability and Google search best practices. He calls me up to boast about his amazing website and I quickly remind him his website is like a great looking husband that can’t find work, is obnoxious and won’t help around the house. They are fun to look at but serve no other purpose.

Six months later he calls begging me to redo the website. His sales have decreased and customers complained about the horrible experience beyond the nice home page.

5. Not Hiring a Team

You try to do it all on your own without the support of others. You don’t need to hire full-time staff. Start by hiring freelancers and part-time help. Learn to limit your role because doing everything on your own means spending time performing tasks that don’t generate revenue or serves your customers needs. Your business simply will not grow without the right professionals to support you. 100% of the clients that have seen phenomenal growth are great at identifying when they need to stop doing something and delegate it to someone else.

I hope these stories will help you make better decisions and position you to grow your online business because when it works it is great. We take great pleasure in helping our clients succeed and nothing pains me more than meeting someone that has a great idea but fails to grow for reasons that were easily avoidable.

Comments

Thank you for this article. Could not stop laughing when you compared the website to the useless husband. Can you write more stories from the trenches. It’d be great to read your insights on things web companies think but won’t say.